04/12/2012
Amcor Rigid Plastics
Mike Schmitt, President Amcor Rigid Plastics
Key messages
Market leader
• Strong customer relationships
• Well capitalised plants and comprehensive footprint
Excellent industry structures
• Continues to improve
• Mostly two key participants in each market segment
Growth
• Innovation leadership and manufacturing excellence
• Broad range of technologies and materials
• Rapidly growing Diversified Products (DP) business
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04/12/2012
Footprint and markets served
Custom Beverage
CSDW
Headquartered in
Foods
Ann Arbor, Michigan
US$3.4b sales
Pharmaceutical
32b units produced
6,600 co-workers
Personal / Home Care
65 plants in 12 countries
Spirits
3
North America Beverage
Ball integration well executed
Solid execution
 Successful integration to deliver $35 million
net synergies in 2013
 Footprint restructuring initiatives completed
by June 2012 with three plant closures in
North America
 Pepsi custom beverage on-site in
Pennsylvania completed June 2012
 Created scale preform CSDW locations
across the network
Outcome: advantaged positions
 Secured long-term custom beverage supply with
on-site manufacturing
 Enhanced CSDW preform cost position in
several US regions
 Manufacturing footprint restructured to enable
co-location with Diversified Products
 Lean SG&A cost structure
Following the Ball Plastics integration, Amcor is the clear market leader in North America
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04/12/2012
North America Beverage
Well dispersed plant network
Custom
Other hotfill
Juice
Moncton, NB
Tumwater, WA
Functional
water
Walla Walla, WA
Merchant Supply Operation
Dunkirk, NY
Mt. Top, PA
Allentown, PA
Napoleon, OH
Brampton, ON
Kenosha, WI
Ames, IA
Itasca, IL
Fairfield, CA
Commerce, CA
Chino, CA
Franklin, IN
Denver, CO
Preforms
Wytheville, VA
Isotonics
Joplin, MO
Blythewood, SC
Tucson,
AZ
Ft Worth,
TX
Orlando, FL
CSD
containers
CSDW
Merchant supply operation
Onsite supply operation
Plant network enables beverage growth in
existing and new segments
5
North America Beverage
Customer and competitor profile
Customer portfolio
Competitors
• PepsiCo
• CSDW
• The Coca-Cola Company
• Plastipak
• Campbell Soup Company
• Constar
• Cott Beverage and Juices
• Dr. Pepper Snapple Group
• Custom
• Ocean Spray
• Graham
• Nestle
• Constar
Strong customer relationships and good industry structure
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3
04/12/2012
North America Beverage
US liquid refreshment market – PET performance
Sales – H1CY 2012 vs. H1CY 2011
50
Total LRB market was up +0.4% over prior period
40
30
38.0%
23.3%
20
10
5.1%
4.2%
1.3%
0.1%
0
-10
CSD
Still water
•
-7.8%
Hot-fill enhanced Hot-fill bottled juice
water
Cold-fill bottled
juice
Hot-fill tea
Sports drinks
Market overall currently flat however growth in selected segments
and glass conversion opportunities still exist
7
North America Beverage
Opportunities for growth
CSDW
• Self manufacture has been managed
• Recently secured substantial new volumes
• Scaled footprint offers advantaged cost position and geographical reach
• Industry leading cycle times in injection preform manufacture
Custom
• Ongoing health and wellness trend to drive growth
• Innovation – Industry leading lightweight and design capabilities
• Glass to PET conversions continue
• New category conversions (Energy drinks: cans  PET; Orange juice: gable top  PET)
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04/12/2012
North America Beverage
Innovation – Key driver of success
HORIZON
IN PROGRESS
NOW
Technology
Scope
Target Strategy
Market
Lightweight
Hot fill
Value proposition/growth
Juice, Isotonics, Functional water
Lightweight
Cold fill
Value proposition
CSD,Water
Barrier
Poliprotect
Value proposition
Shelf stable juice market
Carafe
Stock
Growth
Chilled juice market
Design
Hot fill
Growth
Energy drink market
Lightweight
New technologies
Value proposition/growth
Cold fill and shelf stable juice
Barrier
Hyguard
Growth
Functional waters
Lightweight
Flat fold
Growth
Tetra conversion
Side Action
Premium design
Growth
Premium juice
Innovation leadership will enable Amcor to grow new opportunities
9
North America Beverage
Chilled juice carafe
Business case
KO and PEP are positioned as the dominant chilled juice category leaders with their „Simply
Orange‟ and „Tropicana‟ brands, respectively. These brands have converted into proprietary
carafe-style containers. Smaller and regional juice companies need a solution for their
Brands, which are predominantly in paperboard gable tops.
59 oz
32 oz
12 oz
Amcor‟s value proposition:
Provide the Industry's first family of stylish PET
carafes that offer brand equity to improve the
products‟ on-shelf appeal
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04/12/2012
North America Beverage
Industry leading lightweighting
Multiserve CSD
• Industry lightest on 1L and 2L
• 2L – 8% reduction
• 1L – 13% reduction
• Improved stress crack performance
• Proprietary Amcor base design
11
North America Beverage
Industry leading lightweighting
15.2oz Dole/Ocean Spray
• Hot-fill lightweighting - 18% reduction
• Functional bottle launched without iterations
positively impacting speed of development
• Amcor dedicated supply
• Material enhancements for O2 and UV protection
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04/12/2012
North America Beverage
Industry leading lightweighting
20oz SoBe LifeWater
• Challenging lightweight project for highly stylised design
• 16% reduction
• Improved vacuum absorption
• Amcor proprietary VAB technology
13
North America Diversified Products
Leveraging our manufacturing footprint
• Sales grown 9x since 2005/06
• Recent acquisitions as well as internal
developments have provided access to
capabilities needed to meet diverse needs of
customer base
• Broadest range of barrier technologies in the
industry
DP Plants
12 facilities supply DP products
with seven dedicated plants
Focused on segments where we can use
technology, expansive footprint, operational
excellence to win
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04/12/2012
Food
Healthcare
North America Diversified Products
The industries we serve
4
3
4
2
2
3
4
2
2
HP
C
Spirits
5
HPC
2
2
5
1
2
2
1 = No activity
2 = Segment entrant
3 = Known entity
4 = Strong performer
5 = Segment leader
15
North America Diversified Products
Growth by key market segment
Pharma
Food
•
•
Grow where we can use advanced technologies
(barrier, MLx and hot fill)
Enter new food segments using innovation and
advancements in new and existing platform
technologies (CBF, high barrier PET)
• Focused on growing leadership position in
ophthalmic, leveraging footprint
• Utilize CBF technology for growing generics
market segment, leveraging footprint
Profitable
Growth
Spirits and wine
• Advance position through R&D innovation, speed
to market, and enhanced design across key
accounts
• Defend position through advancements in asset
base focused on delivering improved cost and
flexibility required by segment
Home and personal care
•
Amcor will shift from opportunistic to focused
approach across market segment
•
The growth accelerator process will deliver a
focused list of pursuits capable of delivering
meaningful revenue and impact within a two
year horizon
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04/12/2012
North America Diversified Products
Material sciences – barrier development
Oxygen sensitive products
• Extensive portfolio of commercial materials
– PET, PP, HDPE
• Active and passive systems
• Ongoing innovation and development
• Cost reduction
• Ease of recycling
• Dedicated resources
17
North America Diversified Products
Material sciences – sustainability
Sustainable materials
• Bio-based resins and components
• Increased recycled content
• Industry leading lightweight containers
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04/12/2012
North America Diversified Products
Barrier technology
Del Monte cocktail sauce
• Glass conversion
• 1st introduction of newest barrier system
• New processing & manufacturing
capabilities developed
• Total Amcor team used to validate
performance
19
North America Diversified Products
Lightweighting technology
Gojo collapsible
• Removed 30% of material weight from
package
• Converted to clear PET for improved
package utility
• Fully collapsible design allows for full
product evacuation
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10
04/12/2012
North America Diversified Products
Barrier technology
PBM – Infant formula
• Spiral can conversion
• New EBM platform
• Multilayer barrier construction
• Critical seal tolerances for closure
system fit
• Deliver performance across family of
products
21
North America Diversified Products
Design technology
1.75L Captain Morgan
• Amcor initiated design
• First ever plastic “limited edition”
• 3% sales growth resulted in design becoming
standard 1.75L
• Earned nomination for two customer awards
• Innovation excellence
• Special projects
• Design patent filed
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04/12/2012
North America Diversified Products
New technology platform
Compression Blow Forming (CBF)
• Amcor unique machine/process technology
• Uniform material distribution critical for
Pharma applications
• Enables lighter weights
• Significant productivity improvement
• Major customer conversion underway
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South & Central America
Key messages
• Established footprint
• Favourable demographics with high growth
segments
• Local management with strong country
knowledge
• Global manufacturing expertise and best
practice sharing for operational
excellence
• Good industry structure in most countries
• Strong relationships with major customers
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04/12/2012
South & Central America
Pan regional footprint
CAC
Venezuela
1
1
5
197
C
6
Colombia
5
2
4
Brazil
516
C
2
3
2
776
308
C
C
2
6
Ecuador
1
0
120
C
Countries where Amcor operates
1
Peru
Total
1
0
Argentina
135
C
Amcor Plants
On-sites
16
0
Co-workers
2,300
1
203
C
13
2
C
2
# of
competitors
25
South & Central America
Market opportunity
Major customers
Market size
• Coca-Cola Bottlers
• PepsiCo
• Danone
CSDW
Total market size 50.9b units
CAGR 2011-16
5.3%
RP market size
% Total market
• AJE
29.3b units
58%
Custom
Total market size 9.7b units
CAGR 2011-16
9.4%
RP market size
% Total market
2.6b units
27%
• Unilever
• Johnson & Johnson
Industry leading positions and strong customer relationships
provide platform to capitalise on market growth
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04/12/2012
Summary
•
Broad footprint to leverage for future growth
•
Strong customer relationships
•
Significantly improved portfolio, including
technologies, materials and barriers
•
Un-matched innovation capabilities
Targeted growth in attractive markets/segments
27
Amcor Rigid Plastics
Mike Schmitt, President Amcor Rigid Plastics
14